If the week started off on a quiet note, it was thrown into life late on Friday afternoon after a weaker than expected jobs NFP report sent the dollar a further leg weaker. The unemployment rate was a little better, but after such a strong ADP number earlier on in the week, the market was expecting a strong NFP reading.
I have been saying for a couple of months now that I don’t think that we will see a June interest rate hike, but I find myself questioning that theory this weekend. Some may think that I should be more confident now more than ever, but if truth be told I don’t think that this jobs report will have much bearing. Employment in the US must be close to full capacity and so a slowdown should be expected, secondly the 3 month average is still above 170K and so I suspect that this move was a little overdone. The Fed have openly stated that their main concern is inflation, the wages data came out slightly better than expected – this is inflationary and so I expect that the June hike may be back on.
The Fed talking heads go into a “quiet time” now for the next two weeks and if June was not on the table they probably would have said so by now. The Fed traditionally like to move interest rates on meetings that contain press statements and we only have three of those left for the year.
The EURUSD managed to break range after the report yesterday, the high of 1.1280 held for hours which suggests that the market is not convinced by the move. The pair has closed at a 7 month high and we may start to see some profit taking early in the week – especially ahead of both the UK general election. I will also start watching to see if the market starts to price in its interest rate decision for mid-June.
Cable was a little choppier on Friday afternoon, it did enjoy a move up after the report but it had almost entirely retraced by time the day closed. I suspect that traders were hesitant to be holding long positions ahead of the weekend polls and I suspect that both the EUR and GBP will go into “hibernation” ahead of the vote next week. I will be sitting on the side-lines in both the EUR and GBP pairs this week.
The USDJPY finished on the lowest levels of the week and finds itself close to the monthly support level of 110.25. The USDCAD finished the day only slightly stronger than the dollar, the weak data out of Canada did keep a lid on the pair for most of the day but as the oil price started to recover so we saw the CAD finally move, it is telling that the pair found some support at the end of the day.
The NFP was weak and one wonders if the move was slightly overdone on Friday, either way the greenback finds itself poised to bounce next week. I will be keeping an eye out for the probability of a rate hike in June as the market may start pricing something in this week.
Weekly Ranges 04/06/2017 – 09/06/2017
Majors
EURUSD
Resistance 1.1280 – 1.1300
Support 1.1170 – 1.1150
GBPUSD
Resistance 1.2970 – 1.3000
Support 1.2800 – 1.2760
AUDUSD
Resistance 0.7460 – 0.7490
Support 0.7400 – 0.7380
NZDUSD
Resistance 0.7130 – 0.7150
Support 0.7030 – 0.7010
USDCAD
Resistance 1.3520 – 1.3540
Support 1.3430 – 1.3410
USDJPY
Resistance 111.60 – 111.80
Support 110.30 – 110.10
USDCHF
Resistance 0.9770 – 0.9800
Support 0.9620 – 0.9600
Rand
USDZAR
Resistance 13.1064 – 13.1250
Support 12.7950 – 12.7500
EURZAR
Resistance 14.7025 – 14.7425
Support 14.3755 – 14.3550
GBPZAR
Resistance 16.8930 – 16.9250
Support 16.4400 – 16.4000
Minors
AUDCAD
Resistance 1.0050 – 1.0070
Support 0.9960 – 0.9940
AUDJPY
Resistance 83.00 – 83.20
Support 82.00 – 81.80
EURCHF
Resistance 1.0910 – 1.0930
Support 1.0840 – 1.0820
EURGBP
Resistance 0.8750 – 0.8770
Support 0.8660 – 0.8640
EURJPY
Resistance 125.10 – 125.30
Support 123.90 – 123.70
GBPJPY
Resistance 143.70 – 143.90
Support 142.10 – 142.00
GBPCAD
Resistance 1.7420 – 1.7450
Support 1.7240 – 1.7220
GBPCHF
Resistance 1.2580 – 1.2600
Support 1.2390 – 1.2370
Indices
DE30
Resistance 12780 – 12800
Support 12600 – 12500
UK100
Resistance 7480 – 7500
Support 7340 – 7300
US500
Resistance 2430 – 2450
Support 2400 – 2370
US30
Resistance 21200 – 21300
Support 20990 – 20950
SA40
Resistance 47900 – 48100
Support 46600 – 46300
Commodities
BRENT
Resistance 52.00 – 52.30
Support 50.00 – 49.80
XAUUSD
Resistance 1270 – 1290
Support 1250 – 1230
XAGUSD
Resistance 17.40 – 17.60
Support 17.00 – 16.80
